The Third Wave of the Digital Age

Posted by Graeme Codrington on 31st October 2012

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Last Saturday, I spoke at a TEDx conference in London. The talk I initially scripted would have taken longer than half an hour – not quite TED style! The talk I planned to give would actually have taken about 19 minutes – and the fairly detailed script is reproduced below. (The talk I eventually gave took about 16 minutes – the video will be available soon). As with all TED talks, I had to choose a focus and stick to it. But, hopefully, these themes will be worked out in more detail in the book I am writing, that will be released early next year.

I’d really appreciate your comments on the content below…

TEDxSquareMile: Future of Work, Power to Make a Difference

The third wave of the digital age
by Graeme Codrington

We are living at the start of a third wave of the digital age. And things are about to get very interesting. At least that’s what history promises us. You see, a hundred years ago the world went through a similar third wave of the Industrial revolution, and it changed everything and set us up for a century of growth, development and change.

My 98 year old grandmother was there to witness it. She was born in 1914 when a workplace revolution was taking place. Just recently, at a family gathering, I sat in on a conversation between my near-centurion grandmother and my daughters, her great grandchildren. I have three daughters: 13, 11 and 7 (it’s the digital age – I told my wife they didn’t need names, but she thought otherwise). Anyway, my grandmother and my daughters were talking about the world as she knew it.

As my grandmother reminisced about the things that have changed in her lifetime, it was interesting to me to consider that the biggest workplace revolutions of the last century actually took place in the first few years of her life. In 1911, just two and a half years before my grandmother was born, Frederick Taylor presented a paper to the American mechanical engineering society. It was titled, “The Principles of Scientific Management”, and it laid out the roadmap for the third wave of the industrial age and set up a model of the world of work that survived throughout the 20th century.

Taylor’s ‘scientific management’ approach exemplified the third wave of the Industrial era.

The first wave of any revolution is when inventors come up with new inventions, technologies or machines. They might not see all the implications, but they present these machines and discoveries to society and put them to their most obvious and immediate uses. This happened in the Industrial age with the steam, coal and oil driven motorised engines.

The second wave follows quickly as those inventions are applied in other industries and other areas life. In the Industrial era, the second wave came as the engines were reconfigured, tweaked and customised for different applications in different industries: Spinning jennies and power looms in the textile industry; telegraphs and telephones in communications; trains, planes and automobiles in transportation; and the steam driven printing press in publishing, are just a few examples.

The third wave of any revolution follows more slowly, but it is the most significant. We realise that the inventions are not just there to help us do what we used to do, only better, cheaper and faster, but that we can now do different things altogether. In the world of work, the third wave of change comes from management theorists, different organisational designs and new configurations of how we live and work. In the Industrial age, as factories and machines proliferated, it became clear that changes in how people were organised, managed, measured and rewarded could have dramatic effects on their productivity and outputs. The machines were allowing us to configure our world in different ways.

And that’s where Frederick Taylor comes in. He was a mechanical engineer who worked in one of the big steel mills in industrialised America and later became the very first modern management consultant. He realised that the work done in factories could be analysed and improved dramatically with changes in management and organisation.

Business leaders embraced these new management theories, reorganised their workplaces and reaped the rewards. This third wave of the Industrial age changed the world of work dramatically, and set us on the path to a century of growth. That is the century that my grandmother has witnessed.

A century later, the world she is living in now stands on the brink of a similar radical set of changes, as the digital era enters a third wave. Just like the Industrial Revolution culminated eventually in a revolution in how work was done, so too the digital age we’re living in is heading towards a revolution in how we work. What might have felt like significant change thus far in our lifetimes is merely the first two waves of the digital age. The most disruptive change is yet to come, and its effects will be felt for a century or more.

The first wave of the digital age was about the machines that would change our world and the processors that run them. Computers, PC’s, the Internet, smartphones – we’re integrating these machines into our lives more and more every day.

The second wave of the digital age is about applying these new computing and information technologies to every industry and function, ensuring that they help us do what we already do, but better, cheaper and faster. This too is happening at pace all around the world. Our offices are automated, our purchasing is online, and our communications are mobile. Everyday we find new applications for information technology: Amazon have redefined retail and distribution, Apple have shaken up the music industry, Google are making driverless cars and augmented reality glasses, you can get your DNA sequenced for less than $ 300 and personalised medication is just a few months away, robots are becoming more human, 3-d printing will shake up the manufacturing world. The list is endless. But this is just the second wave – it’s about applying the technologies to existing systems and helping us do things better, faster and cheaper.

The third wave is about much more than that – it is about doing things we haven’t been able to do before. Take Google’s driverless cars as an example of this. These cars use the power of computing processing to analyse the data surrounding a car, with inputs from cameras, sensors and databases. Just a few years ago, we didn’t have portable computers powerful or fast enough to do this type of processing in real time. But now we can. And Google’s driverless cars have this year been declared legal in Nevada and California. These cars will not only soon be legal in your city, I am certain that by the end of the next decade they will be compulsory too. The reason is that they will reduce accidents and increase traffic efficiency, because they are able to speak to each other. Driverless cars don’t just allow cars to be driven better and faster, they allow cars to be driven in entirely new ways, and for a whole intelligent system of cars to work together for a better solution for everyone.

And that’s what is about to happen in our offices too. The third wave of the digital age will bring a revolution of management, organisation design and the way we work. And history tells us that it is this THIRD wave that will truly change the world, and has the potential to set us up for a century of growth, just like the last one did.

So, it makes sense to accelerate this third wave and revolutionise the way we work. Frederick Taylor did not live long enough to see HIS revolution take hold: he died in 1915, just one year and 33 days after my grandmother was born. Let’s make sure that we don’t miss out on the benefits of a third wave of the digital age.

There is obviously much that needs to be done to accelerate this third wave. I’d like to suggest just FOUR good starting points for each of us as we focus on the theme of this conference: The Future of Work, Power to Make a Difference

The first starting point in building the future of work is

1. HOW WE USE TECHNOLOGY

When I started working twenty years ago it was companies that had the best technology. You had to come to work to access the latest equipment, use the most up to date software or have the best connection speeds.

Now, not only have companies fallen behind, they even actively block their staff from using new technology or social media, or force them to use out of date hardware and software, with no options.

– We need to accelerate the “Bring Your Own Device” mindset and a more open IT environment in our workplaces. We need to escape from the tyranny of ‘command and control’ style IT departments that are more concerned about compliance and security than about functionality or business value. Who put IT in charge anyway?

But most of us actually need to just stop lying to ourselves about technology.

What we need to do is take control of our technologies rather than letting the machines control us. Switch off your phone and step away from your inbox more often. When you do take a holiday, set your out of office responder to let people know that you’re not checking your emails and that their email to you has just been deleted.

The third wave of the digital age needs to be about ensuring we DON’T become slaves to the machines we built.

The 2nd starting point for the future of work is

2. WHERE AND WHEN WE WORK

The third third wave of the digital era must finally rid us of an addiction to an office mentality. And it must also open up new possibilities for where we work, who we work with and how we put our teams together.

For example, it’s amazing to me that almost none of the business leaders I work with have even HEARD of eLance, Odesk or similar virtual team resources. We still think the best team is one that shares physical space, and that workers work best when their boss can physically supervise them.

We’ve been talking about this for so long, but now it’s time to genuinely do something about so-called work-life balance. We don’t need to all congregate in offices and herd in and out of our cities at the exact same time every day.

What I am talking about is more than just flexi-hours, working from home, or having a virtual team. Those are good starts, but we need a wholesale change to our management mindset. Most people still prefer to be in the office because they fear their bosses won’t believe they’re being productive when working from home.

We need to escape the tyranny of presenteeism, of needing to be seen. Which is really an aspect of the tyranny of a command and control approach to leadership.

The third wave of the digital age needs a new type of leader to develop a new type of team for a new world of work.

– which leads to the third issue:

HOW WE ARE REWARDED

When she was nine years old, I asked my eldest daughter, Amy, to help me capture some data into a spreadsheet during her school holidays. It was monotonous work, but not hard. I showed her what needed to be done, but just as she was about to get started, she asked, “dad, how much will you pay me?”. I thought she would do it for love at 9 years old – obviously not. A little taken off guard, I said, “Well, Amy, how about £2 per hour?”. She thought for only a few seconds before saying, “OK, dad, but I hope you don’t mind if I work really slowly”.

How is it that a 9 year old girl worked out what well paid HR professionals have not?

Right now, most people get paid mainly for turning up. They’re measured on their inputs: on time spent. If YOU consistently finish your work early, will your boss let you go home; or will you just be given more work to do?

We need to find ways to measure and reward people for their contributions, for their outputs – not their inputs. We know this. But we don’t do it.

Except, actually we do: in the CEO’s office. In 1975, the average big company CEO in the USA earned about 21 times the average worker in their company. By 1995, this number had jumped to 90 times the average worker. Today, the average CEO earns 231 times the average worker.

CEO’s claim they can charge so much because they contribute so much.

If CEOs believe we can accurately measure and appropriately reward THEM for their contributions, why not apply that logic throughout the organisation? It must be possible. CEOs have sort-of proved this can be done. It must now just be done for everyone.

The final starting point I’d like to suggest is a revolution in

4. WHY WE WORK

Most of our companies are still on this relentless quest for efficiency at any price.

They start each financial cycle not by looking at their marketplace or capabilities, but by looking at their numbers. We need 8% increase in revenue, but a 10% decrease in your department’s costs in this coming year: good luck everyone!

This is the equivalent of a general starting a campaign in a war by saying to his assembled leadership team: “Right, we can afford for 10% of our troops to be killed this year. Now what kind of strategy does that buy me on the battlefield?” His majors would look at him in horror. But that’s what most companies do, year after year.

They SAY that their people are their most important assets, but they don’t treat them that way.

The third wave of the industrial age treated people like machines. Luckily for us, the third wave of the digital age looks like it is going to be quite different.

Our digital technologies are being used to connect us and add meaning to our lives. We’re having fun with them, using them in every aspect of our lives, and especially using them to connect with each other. Social media, instant messaging, smartphones are all allowing us to stay connected. They can enslave us, but they also have the power to liberate us. They can drive a wedge between us, but also have the power to connect us. The choice is ours. THIS MUST AFFECT THE WORKPLACE.

This third wave is being driven as much by the relentless march of history and the insatiable demands of commerce as it is by the hunger in the human soul for meaning and purpose. It requires that we rethink not only how we work, but WHY we work as well. This, too, is a leadership issue, as we find ways to bring meaning into our work and our organisations.

My grandmother won’t live long enough to see the full effects of the digital revolution.

But we will. And my daughters most certainly will. My eldest, Amy, was born in 1999 and is likely to live well past her 100th birthday: genetics, demography and modern medicine are all in her favour. Her life will span three centuries. And if my daughters, their friends and their children are to live a better life than I have, in a better world than I’ve seen, it’s now vital that we accelerate this third wave of the digital age and start to reconfigure the world of work in particular.

We do indeed have the power to make a difference to the future of work.